@stocki1 wrote:
Thank you for the clarification.
I believe I used the AOTC for my freshman year; if we accept that I was not eligible, should I file Form 1040-X to amend a tax return? Also, doesn't the IRS check if the person is eligible for the AOTC?
Thank you very much for your time and help!
The income tax system is mostly run on the honor system and most taxpayers are never audited. Plus, your current school is not required to tell the IRS that you have a previous undergraduate degree. As far as they are concerned, if you are enrolled in an undergraduate program, that's what they will report.
You are indeed ineligible if you have had 4 years of post-secondary education, or received a 4 year degree even if you got it in less than 4 years, even if the degree was awarded outside the US. See page 18 here,
https://www.irs.gov/pub/irs-pdf/p970.pdf
You should file an amended return to pay back the credit you were ineligible for. If you don't, the IRS has 3 years to audit you for routine mistakes, and 6 years if they allege deliberate fraud, or your mistake resulted in a mis-statement of the tax you owed that was more than 25% under what you should have owed.
